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Report says green bond market has vast potential

Climate Bonds Initiative’s flagship “Bonds and Climate Change State of the Market 2018′ report” has been launched at HSBC’s Finance for Global Change Forum, one of the first events that kicked off Climate Week New York City on Monday, September 24, 2018.

Oscar Onyema
Nigeria’s Green Bond launch: Chief executive officer of the Nigerian Stock Exchange, Oscar Onyema (left), discussing with vice president, Yemi Osinbajo, at Green Bonds Capital Market and Investors Conference in Lagos on Thursday, February 23, 2016.

The report identifies a “universe” of $1.45 trillion climate-aligned bonds, made up of $389 billion in green bonds.

One key finding was that the USA, China and France are top three countries for labelled green bond issuance, followed by supranationals, Germany, Netherlands, Sweden, Spain, Canada and Mexico.

Another key finding was that, at $532 billion outstanding, transport is the largest theme in the climate-aligned “universe” at 44%, followed by energy at 23% and multi-sector at 15%

Energy has the highest number of climate-aligned issuers (292) while the buildings sector has the largest number of bonds outstanding (1,843).

This points to a large universe of unlabelled bonds financing green infrastructure, implying a huge potential for a larger and even more diverse green bond market.

However, there is still a long way to go. Global emissions remain on track to exceed 2 degrees of warming and $90 trillion of investment in climate projects is needed by 2030.

The report says that if the global community is to successfully combat climate change, global green finance needs to reach a trillion dollars by end 2020 and grow each year of the new decade.

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